Is your house well protected by insurance?

By Thomas WattersonBusiness correspondent of The Christian Science Monitor

Your house does a good job of protecting you from the rain, cold, and snow. But how good is the insurance that protects your house?

For many people, their homeowners insurance was adequate, possibly more than adequate, when they bought the house. But if it has not been kept up to date, inflation has probably opened some wide cracks in the coverage.

Just recently, and perhaps unexpectedly, those cracks have not opened so much because of rising house prices. Increased repair costs have become the culprit.

From 1975 to 1980, home purchase prices increased an average 10.18 percent a year, according to a recent report by the Kemper Group. Last year, reflecting high mortgage rates and the resulting recession in the housing industry, the average home purchase price rose just 1.2 percent.

Home repair costs, meanwhile, rose 9.04 percent from 1975 to 1980 and stayed up at a 9.2 percent level in 1981, the Kemper report says.

As a result, says a survey by Equifax Services Inc., which provides property inspection reports to the insurance industry, 58 percent of American homes are underinsured. That is, they are insured for less than 100 percent of what it would cost to replace them in the event of a total loss.

Whether you are trying to keep up with rising house prices or rising repair costs or both, you should have your insurance reviewed about once a year. This is true even if you have some sort of inflation protection built into the policy. For many policies, the ''inflation guard'' only increases the level of coverage by a certain percentage, often 4 or 5 percent a year.

When they buy insurance, many homeowners are asking for coverage equal to 100 percent of the value of their home, seeing this as a way to make sure their policies keep up with inflation. But some insurance companies say you do not need to insure your home for 100 percent. Even if the house were destroyed completely, the insurers point out, the land it sits on is valuable, and you would only be replacing the structure, not the land. On this basis, you can pay lower premiums by purchasing ''80 percent replacement'' insurance--or do your own calculation as to the value of your land.

But if you opt for this coverage, make sure the appraisal on your house is correct and recent. If you do not, should you have a claim, the insurance company may argue that the house was underinsured and only reimburse you for as much coverage as you were paying for.

There are six levels of homeowners insurance, ranging from HO-1 to HO-6. Some are for single--and multifamily houses, others are for apartments and condominiums.

HO-2 includes everything in HO-1, plus more serious causes of damage, such as falling objects, the weight of ice or snow, collapse of all or part of the building, freezing of plumbing, heating, or air conditioning systems, and damage or injury caused by electrical current. Some companies have a narrower definition of HO-2 and include some of these damages in the broader HO-3 category.

Depending on the type of policy, most experts recommend that you carry at least HO-2 or HO-3 coverage.

The most comprehensive coverage is HO-5. This covers everything except earthquakes, flood, war, nuclear accidents, and other perils specified in your policy. Some insurance companies sell special earthquake coverage, and you can get flood insurance through the US Department of Housing and Urban Development, if your community meets certain requirements.

HO-4 provides renters with liability insurance, covers medical payments, and generally includes the same perils as HO-2. HO-6 does the same for condominiums, plus protecting any improvements to the unit.

Basically, there are only two ways to save money on homeowners insurance: take a higher deductible and shop around for the lowest premium. Remember, though, that a higher deductible could cost you more in the long run should you have reason to make a sizable claim. And a company offering the lowest premium may or may not have the best service. Ask some of your friends and neighbors about their insurance companies and if they are satisfied with the service. Changes in US savings bonds

Several months ago, I read that consideration was being given to changing the interest paid on EE savings bonds. This sounded like a potential investment alternative, especially for someone nearing retirement. However, I have heard nothing since. What is the status of this matter?

D.C.

Last fall, Treasury Secretary Donald Regan asked Congress to approve a floating interest rate on savings bonds, so as to make them more attractive to the public. The bonds would pay a percentage of current money market rates and move up and down with them. The proposal has yet to be considered by Congress.

In the meantime, the 9 percent interest rate on EE bonds remains unchanged, as well as the 81/2 percent rate on HH bonds. EE bonds are discount bonds; that is, you pay half of the face value for them, and they reach maturity, or face value, in 8 years. HH bonds are bought at face value and pay full interest for 10 years, with interest payments made every six months.

I would not recommend savings bonds to someone nearing retirement. You can get much higher interest on shorter-term instruments, such as 6-month money market certificates or money market funds. Any tax advantage offered by the EE bonds is unlikely to overcome this interest rate gap.